When oil-rich South Sudan achieved independence in 2011, it entered the club of nations with a clean financial slate and no government debt.
But in the intervening years, many of them marred by a devastating civil war, South Sudan adopted a go-to tactic for raising revenue: promising future deliveries of crude oil in exchange for financing from commercial banks, multilateral lenders and commodity traders.
South Sudan’s outstanding oil-backed debt now stands at nearly US$2.3bn, according to GTR analysis of government documents, court records and UN estimates. Recent repayments may have reduced the figure, and not all loans may have been declared by the government.
Almost all of the loans have fallen into arrears.
In recent months, legal claims and adverse rulings involving the likes of Qatar’s QNB, the African Export-Import Bank (Afreximbank) and commodity trader Vitol have begun mounting against South Sudan, which “has largely stopped repaying” the loans since 2018, according to a UN report published earlier this month.
Repayment through oil deliveries became even more difficult after a pipeline explosion early last year crimped exports.
The oil-backed debt represents more than half of South Sudan’s estimated GDP of US$4bn as of April. The country also carries a small amount of concessional external and domestic debt.
The state “is experiencing a genuine economic crisis”, the UN Panel of Experts, a body that provides regular updates to the UN Security Council, said in July. The IMF projects the country’s GDP to contract by 4.3% this year.
“This decline in oil exports has had a dramatic impact on the government’s resources,” a UN panel report says, noting that “many civil servants and organised forces have gone without pay for more than a year”.
The South Sudanese Ministry of Finance and Economic Planning did not respond to an interview request and questions from GTR.
Outstanding debts
In June, Qatari bank QNB filed a US court petition seeking to enforce a US$1bn arbitration award it was granted against South Sudan last year.
The previously confidential decision, which was made public as part of the proceedings, shows that QNB originally extended a US$631mn loan to South Sudan shortly after its independence, to help pay for essential imports.
Civil war broke out in 2014, and little headway was made repaying the loan. The two sides restructured the deal into a US$700mn facility, to be repaid by assigning oil cargoes sold by the government to QNB. According to the ruling, South Sudan has repaid just US$71mn.
QNB’s efforts to claw back the money are the latest in a string of actions by creditors that have been promised repayment in the form of oil exports.
Earlier this year, a court in London awarded US$657mn to Afreximbank, finding that South Sudan had failed to repay two facilities extended by the multilateral bank during the pandemic, one of which was supposed to be repaid through oil cargoes. South Sudan did not defend the lender’s claim or appoint lawyers, court records show.
Then, in quick succession, energy traders Vitol and BB Energy also filed claims against South Sudan in London’s High Court.
BB Energy’s claim relates to a single cargo of 600,000 barrels of oil that it made a pre-payment for, a spokesperson for the trader tells GTR.
“At this stage, the claim has been made simply to preserve BB Energy’s rights because the contract has not been performed by the Ministry of Petroleum,” the spokesperson says, adding that “we are always looking to find an amicable solution, especially considering our long-term interests in the country”.
BB Energy purchased 17 cargoes from South Sudan between 2016 and 2022, according to a 2023 UN report.
A Vitol spokesperson says its case “has now been resolved” and declined to provide further details.
Vitol and BB Energy are among several commodity traders to have bought oil cargoes from South Sudan in recent years, including through pre-payments under which traders advance the value of one or more cargoes to the government in exchange for future deliveries.
One of the largest debts owed by South Sudan is to UAE energy trader Nasdec General Trading.
At the end of 2022, Nasdec was owed US$421.4mn, according to a debt policy document published by the South Sudanese finance ministry in June. The UN Panel of Experts on South Sudan, which provides regular reports on the country to the UN Security Council, said in a July 2025 document that Nasdec is still owed “in excess of” US$400mn.
A previous UN report said the trader first provided the facility, of up to US$539mn, in 2019.
Sahara Energy, an energy trader registered in the Isle of Man and headquartered in the UAE, was owed US$128.7mn at the end of 2022 from disbursements of US$348mn, according to the debt policy document and a draft debt “stock take” compiled by consultancy EY in 2022.
The Trade and Development Bank (TDB), a multilateral lender, declared a US$151mn exposure to South Sudan in its 2024 annual report, which it said was mostly covered by insurance and guarantees. TDB’s captive insurer includes exposure to South Sudan, a previous annual report shows.
The debt is the outstanding amount of a US$442mn facility disbursed by TDB to South Sudan since 2021 as oil pre-payments, according to a UN report last year.
Nasdec, Sahara Energy and TDB did not respond to questions from GTR.
Interest rates on most of the loans are typically not declared by the government, although the UN Panel of Experts has said they are “high”. Afreximbank’s two facilities carried rates of Libor plus 7% and 7.5% respectively, according to the EY document, with the rate increasing in the event of default.
The debts to Afreximbank and QNB attract post-judgment interest that will mean the sums continue to grow.
South Sudanese law prohibits the government from accepting non-concessional loans, according to a finance ministry debt strategy document, approved last year and published this June, but the “government could not avoid commercial financing in the context of the fiscal pressure they faced”.
Loan pause
The IMF said last year that South Sudan has not taken on any more non-confessional loans since 2022. But the country, which remains at high risk of conflict despite a 2018 peace agreement, still faces the daunting task of repaying the legacy facilities.
The government receives roughly 40% of the country’s oil output, with the remainder marketed by private producers. Production has fallen substantially since independence, narrowing revenues for the state’s coffers.
During the 2024/25 financial year, the government sold one cargo per month, each worth around US$45mn, according to the UN report. It also earns some non-oil revenue.
The finance and planning ministry said in the debt strategy document that it will stop raising finance secured by future oil deliveries.
“The fact that [oil-backed loans] came at a high cost to the country” means the government “is committed to avoiding oil related debt transactions as part of its medium-term fiscal consolidation strategy”, it said.
Debt Justice, a campaign group, says South Sudan’s predicament highlights the need for the UK, where many legal disputes over sovereign debt are heard, to pass a law stopping creditors suing countries “in debt crisis”. A similar law already exists for countries participating in a G20 framework for low-income country debt restructuring.
“South Sudan is one of the poorest countries in the world and has been devastated by conflict and the climate emergency,” says Jerome Phelps, the organisation’s head of policy and advocacy. “Its limited resources should be used to meet the urgent needs of its people and of refugees escaping the civil war in Sudan, not to make profits for oil traders.”
